Automation for the Intelligent Enterprise Robotic Process Automation's role in today's tax department Sharda Cherwoo
Disclaimer This presentation is provided solely for the purpose of enhancing knowledge on tax matters. It does not provide tax advice to any taxpayer because it does not take into account any specific taxpayer s facts and circumstances. These slides are for educational purposes only and are not intended, and should not be relied upon, as accounting advice. This presentation is 2017 EYGM Limited. All Rights Reserved. EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing we play a critical role in building a better working world for our people, for our clients and for our communities. EY refers to the global organization, and may refer to one or more, of the member firms, of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com. Ernst & Young LLP is a client-serving member firm of Ernst & Young Global Limited operating in the US. Page 2
Contents 1 2 3 4 5 Overview of RPA RPA for Finance What is Robotic Process Automation (RPA)? RPA reinventing productivity A quick demo Tax hotspots for RPA EY s RPA experience and lessons learned How to get started Open discussion Robotic Process Automation What if it meant 25% to 40%+ sustainable cost savings? AND improved accuracy? Page 3
1. Overview of RPA Page 4
Disrupt or be disrupted? Headlines capturing the attention of the C-Suite 30% 40% of existing business process services are likely to be impacted by RPA RPA is estimated to lead to 30% 35% reduction in entry-level roles and increase midlevel roles Gartner Everest Group Cost reduction of 35% 65% for onshore operations and 10%-30% for offshore operations Institute for Robotic Process Automation Estimated that 85% of a typical firm s 900+ processes can be automated; 110m to 140m FTE capacity could be released by 2025 McKinsey & Company Page 5
Automation: Challenging the nature of work, and the future of employment Source: https://hbr.org/2017/02/25-percent-of-ceos-time-is-spent-on-tasks-machinescould-do Source: http://fortune.com/2016/10/17/human-workforce-ai/ / Source: https://thenextweb.com/artificial-intelligence/2017/01/06/japanese-firm-aiartificial-intelligence/ We are going to move from people to things," explained Jane Fraser, CEO of Citigroup's Latin America business We are expecting 500 billion objects connected to the internet automation will hollow out middle and working class jobs Technology is replacing these jobs." Source: http://fortune.com/2016/10/17/human-workforce-ai/ / Page 6
RPA is being focused primarily on back office operations, shared services and bringing outsourced work back in-house Source: http://blogs.wsj.com/cfo/2015/05/05/the-new-bookkeeper-is-a-robot/ Source: http://blogs.wsj.com/cfo/2015/05/05/the-new-bookkeeper-is-a-robot/ A computer robot basically software automates these tasks Robots are taking over corporate finance departments, performing work that often required whole teams of people. Demand for RPA tools is growing quickly, at about 20 percent to 30 percent each quarter, according to Gartner. Page 7
What is Robotic Process Automation (RPA)? Incremental value Robotic Process Automation (RPA) RPA is the application of software robots, not physical robots, that mimics human action and connects multiple systems through automation without changing the existing IT landscape Augments human intelligence Mimics human intelligence Mimics human actions Semi-cognitive Cognitive intelligence (CI) Structured data interaction Robotic Process Automation Improved workflow Optimized process through automation Statistical Pattern-based machine learning Page 8
Business led transformation under IT governance What are the benefits of RPA? Low risk Non-invasive technology Overlaid on existing systems and integrated with existing data minimizing disruption to IT strategy and architecture. RPA technology can begin with simple rules based tasks and scale to more sophisticated algorithms and machine-learning functions as the organization matures. RPA often fills the gaps between existing systems Accuracy Double digit reductions in error rates Right shoring Geographical independence reduces need to offshore jobs while still delivering cost savings Consistency Identical processes and tasks, eliminating output variations Productivity Freed up human resources for higher value-added tasks. Cost savings Ranging from 20-60% of baseline FTE cost Cross-industry Across industries, since it follows procedures in use Reliability No sick days, services are provided 365 days a year Audit trail Fully maintained logs essential for compliance Retention Shifts human effort toward more stimulating tasks Scalability Instant ramp up and down to match demand peaks and troughs ROI Typical RPA projects include multiple functional pilots but the program is completed in 9 to12 months with an ROI < 1 year Page 9
RPA survey: Companies are focusing on quality, predictability and speed as key components of intelligent automation What do you believe to be the most important components of the value proposition for Robotic Process Automation? (Choose Top 3) Driving more predictability and higher quality in the 65% Speeding up the time to complete the process 50% Freeing up staff to move to different projects Reducing cost on the continual basis, beyond the Creating more reliable data sets for analytics Increasing the standardization of processes Enabling us to move business-outcomes vs. FTE Eliminating staff positions Increasing control/visibility of end-to-end processes 38% 35% 32% 29% 24% 21% 18% Gaining a competitive advantage in my industry 3% Source HfS survey of 800 C suite executives 2015 Page 10
The value proposition: ~10X ROI coupled with ~50X less difficult to implement Illustrative automation horizon high ERP, CRM 1X Hardest, Consuming 50X BPMS Frequency of tasks Big, Risky 2X 10X Robotics 10X Scalable, Fast 1X low low Task specificity high Key: Relative ROI %, Relative difficulty/time to implement Page 11
Reinventing productivity: Taking the robot out of the human Robotic process automation (RPA) A software solution that runs unattended, working like a virtual employee with legacy applications performing repetitive tasks reliably at the User Interface level Current workforce Taking the robot out of the human allows your employees to focus on driving growth in the top line, reducing costs, and focusing on value added activities Comparing data sets Composing and sending emails Bot management Develop customer relationships Analyzing data Management decisions Automation of clicks, data entry Reading, copying, aggregating data Completion of auditable activity logs Tax planning/issue resolution Landed cost reductions Interaction with the business units Managing exceptions Entering data into a system Rules-based processing and decision making Systems upgrades/rollouts Strategy 5 Page 12
2. Tax hotspots for RPA Page 13
Process characteristics to consider for tax Process characteristics to consider for RPA High, repetitive transaction volume With robotic automation, the virtual software bot has authorized access rights to perform the activities undertaken by a human, by moving through and across the relevant applications. High manual data entry Multiple systems to perform a task Multiple tasks to perform the process Data entry and validation User interface navigation Automated formatting Email Populate Consolidate reports, returns Bot supporting Bot Bot and do worksheets and cross reconcile checks XML and e-file return Copy/paste operations Login/logout of applications/emailing Activities typically performed by RPA Page 14
Automation hotspots for Business Tax Compliance Common areas where bots help to drive value Saving work papers and tax returns 10 1 Extracting information from systems efiling 9 2 Formatting and work paper creation Mailing and printing 8 Automation hot spots 3 Data validations and rollforwards Disclosures and attachments 7 4 Inputting data into tax systems and forms Reconciliations 6 5 Generating reports High volume Repetitive Timing Page 15
Case study: tax provision reporting The challenge Why automation What we did Outcome Numerous tax provision reports generated from ONESOURCE Tax Provision (OTP) are used by the tax departments during the period close cycle. Data frequently changes, so the reports must be re-run. Delay in getting the reports to the department has adverse effect on meeting the critical close cycle deadline. During critical quarterly and annual close periods, tax professionals constantly need to run and format reports during the review of the provision, interim provision and estimated payment data. This is time-consuming and the reports are prone to errors, if they are done manually. Used Blue Prism RPA tool to generate tax provision reports from ONESOURCE Tax Provision. The key steps below: Significant time savings, increased speed, accuracy and efficiency (less manual keying of data) Teams spent more time on review and less time on preparation (better leverage of knowledge worker skills) Reduced labor cost Reduced human errors Log-into ONESOURCE tax provision application Combine and format reports into a single Excel provision workbook Review provision workbook Generate tax provision reports from OTP Notify user via email once workbook is posted to document repository and ready for review Robot Link to video Human Page 16
3. EY s RPA experience & lessons learned Page 17
EY has the experience to reinvent productivity Our 18 month RPA journey Quality: Significant increase in accuracy with on-time delivery Reinventing productivity with scale in mind Agility: Increased capacity to handle high transaction volume Implemented 160+ bots in 18 months Compliance: Fully maintained audit trail for compliance; enhanced controls and tracking Blue Prism & Automation Anywhere, RPA tools Talent retention: More intellectually challenging work, leveraging potential of people Value and insights: Improved accuracy, responsiveness and on-time delivery while gaining deeper insights into processes 100,000+ annual tax filings Applied RPA to over 200 processes, 14 practices RPA has been a catalyst for process improvement 100+ process improvements 24/7 Flexibility and reliability: Automated solution; 24/7 operations Sustained business impact driving value for our clients and our people Page 18
Top 10 lessons learned during our RPA experiences 1 3 Not considering RPA as business-led, as opposed to IT-led 2 Underestimating what happens after processes have been automated 4 Not having RPA business case, postponing planning until after proof-of-concepts (POCs) or pilots Treating robotics as a series of independent, unrelated automation actions vs. an end-to-end a comprehensive change management program 5 Targeting RPA at the wrong processes 6 Applying traditional delivery methodologies (not agile) 7 Automating too much of a process and not optimizing for RPA 8 Forgetting about IT infrastructure 9 Assuming RPA is all that is needed to achieve great ROI 10 Assuming skills needed for a PoC are good enough for production automation Page 19
4. How to get started Page 20
A four prong approach to deliver sustainable value through intelligent automation 1. Business engagement How will RPA enables our subservice line to achieve Vision 2020 and our long term business strategy? Visioning What will be our key success metrics cost savings, efficiency, improved client service, compliance so that we can communicate them to our people? Have we identified leaders that need to be aligned and are they aligned on the vision? Defined their roles? What stakeholder groups do we need to engage and in what sequence to manage the changes triggered by RPA? 2. Business readiness How do we prioritize by modelling out the practices and processes in scope for RPA? Current state assessment Business case Leadership alignment Stakeholder engagement Change impact and readiness assessments How will RPA impact roles and responsibilities? Career paths? What are there internal mobility options that should be articulated to our stakeholder groups? 4. Rapid and sustainable benefits realization Implementation How do we implement and communicate RPA successes to drive support? Performance monitoring 3. Business adoption How do we monitor performance and embed IA goals in performance management to ensure value? Training & performance support What training and support do our people need to be successful? Organization and talent realignment Do we need to realign the organization, roles and responsibilities for maximum value from RPA? Page 21
5. Open discussion Page 22
EY Thought Leadership A Digital Optimist s Guide to Aligning People, Robots and Transformative Processes With AI programs doing more of the what, our professionals can focus on the why getting us to the critical components of a solution much faster How to Win Friends and Influence Robots Robots don t kill jobs, they free up talent human beings to focus on higher-value work. Tech fashion update: Robotic Process Automation is the new black RPA is the tip of a large iceberg of change; ironically, process automation teaches us that technology evolution itself is a process. Disrupt or Be Disrupted: 3 Important Lessons On Prevailing in Times of Great Change Never get complacent, consider convergent business strategies to be more agile and foster a culture of innovation Effectively Incorporating AI in Professional Services: Path to First Mover Status To understand AI, think what it takes to be a thoughtful, analytical and decisive human. RPA: The quest to free-up our professionals for more challenging and rewarding work Drone work is an innovation killer. My job is to inspire creativity and liberate entrepreneurism. Embracing Automation for the Potential It Unleashes New roles are evolving that require upskilling and re-training to meet new expectations we see a transition toward the skills of tomorrow. Home hunting for your collaborative robots: Farm, cloud or back-office closet? RPA is probably the best example of how RPA takes the robot out of the human. Page 23
EY Assurance Tax Transactions Advisory About EY EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com. Ernst & Young LLP is a client-serving member firm of Ernst & Young Global Limited operating in the US. 2017 Ernst & Young LLP. All Rights Reserved. 1701-2156777 ED None This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax or other professional advice. Please refer to your advisors for specific advice. ey.com